Ministers’ plans to ensure flood insurance is widely available will not extend to private rented accommodation leaving landlords and tenants in flood affected areas vulnerable to massive financial burdens, warns the RLA.
Just days after much of the east coast of England faced some of the most serious flooding in over half a century the RLA is seeking urgent clarification from the Government over its flood insurance proposals currently going through Parliament.
The ‘Flood Re’ scheme aims to ensure that flood insurance remains affordable and available to homeowners at high risk of flooding. The scheme, designed in conjunction with the Association of British Insurers, would provide a fund to offer those at high flood risk who might struggle to get affordable flood insurance with cover at a set price. Insurers would put into the fund those high flood risk homes they feel unable to insure themselves, with the premium to cover the flood risk part of the household cover capped.
Having been led to believe that landlords in the private rented sector would be covered, the Government’s response to the consultation on the scheme concludes that properties would be excluded where the owner does not reside in it. This would effectively exclude rented properties. This would mean landlords and tenants may not be able to obtain affordable insurance cover and would have to meet the full cost of any damage.
The Government document explains:
“For properties to be eligible for Flood Re, they would need to be insured in the name of an individual, they would need to have been allocated a Council Tax band; be used for residential purposes; have an individual premium; and be occupied by the policyholder, or their immediate family.”
Outlining the RLA’s concerns, its Policy Director, Richard Jones has now written to the Environment Secretary, Owen Paterson MP, seeking urgent clarification on the matter. In his letter he writes:
“This is an extremely disturbing development and poses significant threats to the ongoing viability of those areas where there is a significant risk of flooding. Insurance may not be obtainable at all or only obtainable on prohibitive terms. It could place landlords in breach of the terms of their mortgages.
“The Government is looking to support private rented housing but this will have the opposite effect.”